We should dump new child poverty figures in the nearest black hole

Lots of children escaped from poverty last year, according to the official figures. Hooray!

Only thing is, they weren’t any better off. The actual buying power of the households in which they lived didn’t change.

How can this be?

Definition: The last government's measure of poverty children living in households with an income below 60 per cent of median earnings was enshrined in law

We are in the realm of poverty figures here, a field of social scientific inquiry roughly comparable to the outer fringes of cosmology. Space is curved, an astronaut who travels to the Andromeda galaxy will meet herself coming back, that sort of thing.

All that speculative astronomy is just wormholes to me. But I can tell you how it came about that, in the world of poverty research, you can get richer without having anything more to spend at all.

The issue of how to measure child poverty has proved contentious

Way back in the 1960s – you probably guessed – there were academics and campaigners dissatisfied with the idea that the post-war welfare state had ended poverty. It was true that the NHS was providing free healthcare for everyone, and that national assistance, as welfare benefits were called at the time, meant unemployed people were much better off than they had been in the past.

That wasn’t good enough for the left. Marxism decrees that the poor must get poorer because of the evils of capitalism. So poverty was re-invented.

The trick to doing this was the idea of relative poverty. Being poor, the theory went, is not a matter of what you actually have. Not in a modern western society, dear me no.

The only proper way to measure poverty is to compare what people have to what everybody else has.

So what you do is, you take a set proportion of average income and say that is the poverty line, and anybody below it must be poor. The line has generally been set at 60 per cent of the income of the average home, with the average calculated so as to remove the skewing effect of the super-high incomes of very rich people.

RELATED ARTICLES

Share this article

Share

There is a beauty to this method of measuring poverty. It means that if society as a whole gets richer – and it has in a big way over the past 50 years – you will get more poor people.

As the wealth of the average person goes up, so there are certain to be more people below that 60 per cent line. Hey presto! Marx was right! Desperate poverty is everywhere and we are grinding the faces of the dispossessed.

Solution: The only objective way to measure child poverty is to simply compare what people have to what everybody else has (posed by model)

These arguments, strongly championed by Gordon Brown in the days before Labour came to power in 1997, led to some hilarious excesses. I can remember one famous television cook claiming that a family were in terrible poverty if they had trouble affording new trainers to keep a teenager up with the fashions of his friends.

A television company pronounced that no boss should earn 20 times more than their lowest paid employee. Its boss was on around 40 times more than his lowest-paid employee.

People started to wonder. They puzzled over the way, under the relative poverty measures, Britain appeared to have much worse poverty than, say, Costa Rica. They noticed that you could have several televisions, a freezer and a dishwasher, mobile phones, a computer and a car and still be counted poor.

People started to say, these figures don’t measure poverty at all. They measure equality.

To their credit, Labour politicians had begun to take this into account by the time Gordon Brown went to Number 10. For the last few years, state poverty figures have included an assessment of what children really have – a bedroom of their own, a holiday, a bike, friends round for tea – in an attempt to provide a balancing picture.

But they stuck to grandiose targets for achieving an end to child poverty based on the meaningless relative poverty figures. These targets seemed more and more unachievable as the boom years went on.

Yet now when we have a recession, surprise surprise, child poverty seems to be getting better.

Change: Iain Duncan Smith has indicated he wants to tear up the method of measuring child poverty by family income, introduced under Labour

The new figures show that the number of children in homes below 60 per cent of median income fell by two per cent, before housing costs, in the year to March 2011 compared with the year before.

Those of you who have stayed with me through this story will have worked out why already. Median household income in the year in question fell from £432 to £419, the first drop since the 1990s.

The children weren’t any better off. They would have been worse off but for the fact that state benefits went up faster than the incomes of working people. But the poverty figures would still have said the opposite.

That is why Iain Duncan Smith wants to work out a new way of measuring poverty, and that’s why he’s right. We need to be able to see how children are doing in terms that mean something, including the nature of their families and how well they do at school.

And we would all be better off dumping the relative poverty figures into the nearest black hole.